Earnings
CATL shares slide about 9% after third-quarter profit growth slows to 14.5%, well short of forecasts
The world's largest EV battery maker grew revenue 58.6% but margins narrowed as competition intensified and lower-margin storage products took a bigger share of sales.
HedgeWeekly News Desk ·
Contemporary Amperex Technology (CATL) shares fell sharply in Hong Kong and Shenzhen on Wednesday after the battery maker reported its weakest quarterly profit growth in nearly two years. Its Hong Kong-listed shares dropped 9.4% to HK$373.2, a 15-month low, and the Shenzhen A-shares lost about 9% in the morning session after opening 5% lower.
Net profit attributable to shareholders rose 14.5% from a year earlier to 21.25 billion yuan in the July-September quarter, according to the company's exchange filing. Analysts had expected growth of 41.2%, based on LSEG SmartEstimate data cited by Reuters, and the result was down 5.8% from 22.55 billion yuan in the second quarter. Revenue climbed 58.6% to 165.22 billion yuan, slightly below the 60.2% growth analysts had forecast.
Costs grew faster than sales. For the first nine months, cost of sales rose 61.6% against revenue growth of 56.2%, pulling gross margin down to 22.72% from 25.31% a year earlier. Reports on the results pointed to fierce battery competition, cooling car sales growth in China, higher operating and research costs, and a shift toward lower-margin energy storage products. CATL's share of China's power battery installations fell to 40.9% in September from 49.8% in January, while BYD's rose to 21.1% from 17.4%, although CATL still held 39.4% of global EV battery usage in the first eight months.
Why it matters: CATL is a core holding for many China and EV-supply-chain funds, and this quarter shifts the debate from sales volumes to the quality of earnings. Accounts receivable rose 47.8% and inventories 53.2% from the end of 2025, while nine-month operating cash flow fell 23.6% even as revenue surged. The company has said it expects energy storage to make up half of its global revenue by 2030, up from about a quarter now, so investors will watch whether that mix shift keeps squeezing margins in coming quarters.